ADP gets even bigger

ADP gets even bigger

Concern remains over timely implementation

The size of the Annual Development Programme for the next fiscal year gets even bigger as the National Economic Council yesterday approved the ADP of Tk 80,315 crore.
The NEC raised the ADP by Tk 1,284 crore from Tk 79,031 crore, proposed by the planning ministry, despite growing concern over project implementation and availability of resources.
The approved ADP is about Tk 20,000 crore more than the revised ADP for the current fiscal year.
Considering the demands from different ministries, Prime Minister Sheikh Hasina decided to increase the size of next year's ADP at the NEC meeting, Planning Minister AHM Mustafa Kamal told reporters after the meeting.
Kamal said the ministries had pressed for an ADP of Tk 100,000 crore, but the allocations were finally made on the basis of their capability.
In the revised ADP for this fiscal year, the finance division allocated Tk 55,000 crore, considering the availability of resources and implementation capacity of the ministries. The NEC then increased the ADP by Tk 5,000 crore.
But the government could implement only 43 percent of the ADP in the first nine months of the current fiscal year, which was 6 percentage point lower than that in the corresponding period of the previous fiscal year.
Zahid Hussain, lead economist at World Bank's Dhaka office, told The Daily Star that Tk 800 billion ADP for fiscal 2014-15 is too big to be implemented, considering the lack of project readiness, procedural constraints, capacity deficiency in line ministries, and usual delays in procuring goods and services.
However, the planning minister said, “The ADP has been approved today striking a balance between the demands of various ministries and our ability”.
He said the prime minister directed the secretaries to take necessary steps from the start of the next fiscal year to ensure full implementation of the ADP.
The increase in the ADP size will not raise the budget deficit, and it will remain within 5 percent of the GDP, the minister said.
The additional allocation will be provided from government's own resources which will make up for 65 percent of the ADP. A big portion of it will be collected through direct borrowing from banks and people.
Thirty-five percent of the ADP will be implemented with foreign assistance.
Interestingly, a huge amount of foreign aid still remains unutilised.
The ministries' demand for foreign funds is very low because they have to meet many conditions and follow certain procedures to get the money disbursed, said a planning ministry official on condition of anonymity.
The government has taken up 1,993 projects under the ADP for the next fiscal year. Of those, 1,034 projects have already received allocations while 959 await approval.
Block allocations of Tk 5,510 crore have been kept for the 959 unapproved projects.
Of those, 683 projects will be implemented with local resources and the rest with foreign assistance.
Zahid said, “The number of projects in the ADP has been swelling year after year because of low project completion rate in relation to the inclusion rate of new projects.”
New projects for constructing large power plants and expressways are certainly needed, but the implementing agencies must be prepared to implement such projects quickly, he said.
Several ongoing projects in the ADP need to be implemented quickly to improve the infrastructure, and meet the energy needs.
“It is time to take a proper account of the trade-off between the populist mileage obtained from appeasing constituencies favouring more and more new projects versus the longer term political gain from completing high priority ongoing projects,” he said.
As a single project, the Padma bridge has received the highest allocation of Tk 8,100 crore, which is more than 10 percent of the total allocation.
The planning minister said the construction of the bridge will be completed in three years. “It is our dream project. Through its implementation, we will show the world that Bangladesh has the capability to accomplish such big feat.”
Autonomous bodies will implement 153 projects involving Tk 5,685 crore with their own financing. Their development budgets will merge with the allocations for the ministries in line with an NEC decision, sources said.

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